Imagine a company interviewing candidates for a recently vacated role. One candidate comes in and almost immediately states that she would need a significant hiring bonus in order to accept the position. Needless to say, she won’t be offered the signing bonus – or the job.
Salary negotiations are nerve-wracking enough without adding a signing bonus to the list of details to be hammered out. But if you don’t negotiate for one, you could be leaving some serious cash on the table. Still, you don’t want to broach the subject before you even know whether the company wants to hire you.
Here are tips for negotiating a (big) signing bonus the right way.
Do your research
Companies are far more likely to give out signing bonuses when they’re competing with other companies for the same candidates. In a competitive job market, it’s a challenge to find and hire the right people. So do your research, both online and by asking friends and colleagues. This will help determine how much you’re worth and how much competition there is for top candidates. Check out our Salary Guide and Jobs Report for more information on the job market and salary figures that are specific to your local market.
Wait for an offer
Never bring up the matter of a signing bonus before you’ve received an offer. First, it comes off as arrogant. Second, the company may decide to offer a lower annual salary in favor of the signing bonus.
Wait until you have the salary and other aspects of your annual compensation in writing before broaching the subject.
State your case
Be prepared to tell the potential employer why a signing bonus is in order. Maybe you’re giving up an annual bonus, more generous vacation time or stock options from your current employer to accept the new job. Maybe taking the position will require a big move and a signing bonus can offset moving expenses.
The ask is easier when you make a case for why a signing bonus is warranted.
Not sure how much to ask for? Not surprisingly, senior-level employees receive higher signing bonuses than entry- to mid-level employees. In fact, according to a survey from World at Work, 40 percent of respondents paid over $50,000 in signing bonuses for senior-level positions, compared to $5,000 to $9,999 for other employees.
When you ask for a signing bonus, ask for a range as a percentage of your annual salary. The employer may not have room in their budget to pay out the high-end of your range, but be gracious and show appreciation for their offer. You may be able to negotiate it higher or use it to leverage other perks, such as a larger professional development budget, commuting benefits or a health reimbursement account.
Understand the terms
To protect themselves, companies often require signing bonuses to be repaid if you voluntarily leave the job within one year. Other companies won’t issue the check until you’ve been there a certain amount of time or pay out signing bonuses in installments over the course of six months or more.
Read the fine print and get all of your questions about the signing bonus (and other aspects of the compensation package) answered before you accept the offer.
Keep in mind you’re also more likely to get a signing bonus if you were recruited and are leaving an apparently stable position. So let your Parker + Lynch Consulting agent go to bat for you. They know the businesses’ unique financial situation and how to get you the best offer possible.